If your sales and marketing costs don’t add up, or seem suspicious, it could be that you are one of the many victums of click fraud. 

What is Click Fraud? Click fraud is when a human, automated script or computer program clicks on a paid asvertisment for a fraudualent or non-legitiamte purpose. The purpose is to artificially raise a competiors marketing costs and publisher’s income from Adsense (Lecture Notes).

This is a major concern to web businesses because a large amount of their marketing budget might be wasted on fraudulent clicks. In addition, it is almost impossible to measure success of the ad or campaign if there are fraudelent clicks. 

Fraudulent traffic accounted for 28.1% of all ad hits on such networks during the third quarter of 2007, compared to 25.6% for the second quarter of this year, and 21.9% for the first three months of the calendar, Click Forensics contends. Outside of North American countries, click fraud is most likely to originate from France (4.2%), China, (4.1%) or Germany (3.7%). Moreover, “with the Canadian market about two to three years behind the U.S, click fraud maybe be more prevalent in the Canadian market.

It is obviously an issue that should be dealt with better by search engine sites.  Even though search engines can make a profit from fraudulaent clicks, as it drives more traffic to their sites.  Web businesses might become frustrated if nothing is done about this.  If there is a search engine that can closely monitor fraudulent action, this will attract more e-commerce businesses.  If firms can trust that their ads are being clicked on by ligitimate consumers, than it could be more wothwhile for them to spend more advertising dollars. 

What is being done? Google is testing a new advertising model to deal with click fraud: cost-per-action ads. Advertisers don’t pay unless the customer performs a certain action: buys a product, fills out a survey, whatever. Further more, to combat the negative publicity, last week Google launched its Ad Traffic Quality Resource Center, which intends to provide advertisers with information on click fraud.

Google has started to realize that something has to be done.  A large portion of their profit comes from businesses advertising on their sites. However, if this issue is not effectivley dealt with then google could lose out on future e-commerce business ad dollars. It is only a matter of time before another search engine company comes out with the technology to effectivley deal with this problem and then could potentially steal business away from google.

References

 Biz Report ClickForensics: Click fraud reaches 16%http://www.bizreport.com/2007/10/clickforensics_click_fraud_reaches_16.html 

Click Forensics: Experts say issue of click fraud not improving Google disputes the results published. http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9043542&intsrc=news_ts_head

Globe and Mail: Fighting click fraud: Is it really down for the count? http://www.theglobeandmail.com/servlet/story/RTGAM.20070822.wgtclick23/BNStory/PersonalTech/

Wired: Google’s Click Fraud Crackdown  http://www.wired.com/politics/security/commentary/securitymatters/2006/07/71370